The market value of Nottingham's intu Victoria Centre was slashed by almost a third in just one year, according to figures from the company.

Data reported in the shopping centre giant's annual report show the 2018 value of the property was £261m - a fall of 28 percent on 2017 - which was described as 'unexpected' by one retail expert.

The company's shares were trading at a 64 percent discount to the value of its assets by the end of 2018 and overall it saw £1.4 billion wiped from its property portfolio.

The Victoria Centre's value reduction was the biggest across its portfolio of shopping centres. By comparison, the second biggest drop was at intu Braehead, near Glasgow, which fell by 20 percent.

Nelson Blackley, a retail research associate at Nottingham Business School, said: "The fact that intu shares are trading at a discount of 64 percent to underlying net value of assets indicates the lack of confidence investors have in things getting better anytime soon for all those landlords, including intu, that have a large retail property portfolio.

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The Broadmarsh redevelopment

"The fact that the Victoria Centre valuation dropped 28% in the last year is unexpected given the occupancy rate is 98%, slightly higher than all intu-owned centres (97%), and survived relatively unscathed from 2018's closures in other towns and cities of House of Fraser and HMV etc.

"It is possibly a reflection of an over-valuation in 2017 following the £42m refurbishment."

Intu says the valuations are conducted by independent agencies and the fall in the Victoria Centre was "due to a number of considerations".

The spokesman added: "The valuations are in accordance with the Royal Institution of Chartered Surveyors (RICS) Valuation – Global Standards 2017 and were arrived at by reference to market transactions for similar properties and rent profiles.

"In respect of development valuations, deductions are made for anticipated costs, including an allowance for developer’s profit and any other assumptions before arriving at a valuation."

Intu released its annual results on Wednesday, with bosses putting the market value of its properties down to "weakening sentiment in the UK property investment market".

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Occupancy rates by retailers did stay relatively steady, dropping 0.3 percent to 96.7 percent, while rental income came to £450.5 million - a fall of £500,000.

Elsewhere in the report, the FTSE 250 firm's underlying earnings stood at £193.1 million, but it still made a pre-tax loss of £1.18bn. In 2017 it made a profit of £227 million.

Responding to these figures, and the property value overall, John Strachan, intu chairman, said: "Intu has had a challenging year with a difficult retail and uncertain economic environment, together with responding to two abortive corporate offers for the company.

"However, our management team has produced a robust operational performance with increased like-for-like net rental income for the fourth consecutive year, 97 percent occupancy and signed 248 new long-term leases."

While admitting the dramatic fall in the Victoria Centre's value was not expected, Mr Blackley did not think the same of the company's performance overall.

He said: "It is not a surprise given the rash of retail failures in the past year, the seismic shift in the retail landscape and that Intu are looking for a new CEO."

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Despite the 2018 figures, finance chiefs at intu have committed to following through with the regeneration of the intu Broadmarsh Centre. Construction on the upper mall is due to begin on Monday.

When finished the new-look centre, which will include glass frontages, will have a new cinema and bowling alley, turning it into a leisure destination rather than purely shopping

Mr Blackley added: "Intu have indicated they are looking to diversify into leisure and entertainment facilities in their centres - as they are doing at Thurrock and in the Broadmarsh redevelopment, for example. This reflects what consumers now expect in shopping centres."

The Broadmarsh redevelopment is expected to be completed in the second half of 2021.

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